Ah, impulse spending. It’s a big common enemy to any one of us, and it can strike at the least expected moments— be it in a shopping mall, browsing through some online sites with truly juicy promotions (like those 50% offers along within a tantalizingly short promotional period). Admittedly, these can be really hard to beat as the forces of marketing and advertising are really strong as they play to our consumer psychology on a fundamental level, with things like advertisement placement and presentation being so thoroughly researched and tested to fully exploit our subconscious.
However, these can be beat with some simple tricks, which involves simply just actively thinking about it!
Impulse buying can be dangerous as you can even be subtly manipulated into really persuasive offers to do it subconsciously, and the full impact of your purchase will probably only sink in after the milk is spilt. If you give some thought to it, along with applying some simple strategies, you can actually beat them at their own game!
If impulse buying has been the main adversary of your monthly budget (oh, let’s be honest here), here are some simple tips and tricks for beating this urge. If you find one or a few that really works, you can use them in tandem too!
1. Keeping a money diary
Write down every purchase, even the smallest of purchases, in a diary, notebook or organizer that is usually with you at all times. With your expenses being down on paper, you can constantly see where your money is going to, and thus help in seeing which expenses are unnecessary and can be excised. Also, with your purchases (along with intended ones) being in black and white it also gives you a better overview with some mental space for planning and sifting through your expenses, thus reducing the impulsive urge to spend on unnecessary items.
In this day and age, one can also opt for apps (like our free expense manager app Expense IQ) that acts as a digital record which provide the convenience of filtering and report generation. You are also less likely to forget bringing your phone about than a physical diary!
2. Don’t go to the mall if you have nothing specific in mind
Some of the shopping impulses can come in if you’re in a shopping area with all the luscious offers dangling in front of your very eyes. This temptation can be amplified if you have time to dawdle away with some spare cash in your pocket that could be better used on necessities.
Only go to the store if you have a specific necessity to purchase that’s already written on a “to-buy” list. Don’t buy anything not on the list unless you realize that you’re missing out on an important necessity (which is unlikely to happen by then anyway). Try to buy your stuff, and get out as soon as possible instead of window shopping for entertainment – the longer you stay, the more tempted you can get!
3. Stay home
This works hand in glove with the point above! Don’t go shopping when there isn’t a need to and you are simply bored. Try to find some other amusements and hobbies that don’t involve spending – music, exercise, or even inviting your friends over for some games!
Dig out that childhood board game, or organize a mini basketball match at the neighborhood basketball court! Playing games is a good way to socialise and forge deeper bonds with the people around you, which already sounds like a pretty good deal – you probably only need to get some drinks – share the cost, even!
4. Pay by cash
This one is a great psychological trick! One of the things about paying by cards is that they encourage overpaying— you unintentionally spend more than what you are prepared for, as the process is easy and extremely convenient.
This is in part of the psychology behind experiencing the consequence after a benefit: With cards you can spend away without feeling the immediate “pain” of losing money, as this only appears at the end of the month as a bill (with regrets); while with cash, you experience the consequences immediately as you hand over those dollar bills. You have a little stack of $20 in your wallet, and now you don’t. You can’t “work it out later”, or put this action out of your mind. This will definitely make you think twice about parting with your money on a certain desired purchase – it makes you think and weigh harder about the costs and benefits involved in a transaction before you commit!
5. Weigh your Needs vs. your Wants
This is in no part a new concept to saving, and in actual fact does not take much time to sort out – one can easily get it sorted in 10 minutes! It is also a good habit to keep in mind at all times.
Admittedly in this era inundated with technology, many thing that were previously classified as a “want” with respect to the classical elements for survival (food, clothing, air, water) could be considered as a need now, like electricity and the Internet. However, needs and wants may not need to be itemized; it can also be considered with respect to when you require it.
Take for example, when purchasing a car or a piece of furniture. Sure, it may look and feel good buying a more costly first-hand item, but do the means really justify the ends when you can get a much cheaper second-hand item? The same goes for food too: you may desire to say, eat a pizza. It may pander to your impulses by spending at a pizza restaurant, but similarly delayed gratification may save you quite a bit, if you consider buying frozen pizza from the supermarket to heat up at home while savoring it in front of a TV! Find frozen pizza lacking? Get the discounted bacon too, and experiment with seasonings – every bottle goes a long way.
6. Pack lunch (or maybe even dinner)
This method although not new, is surprisingly underutilized. Many people allocate part of their monthly budget into meals, not considering that this cost can actually be reduced! By saving about $10 each working day by packing lunch or sandwich, not only you get to save about $200 a month, but you also save the time and hassle of trying to find a seat at the nearest restaurant or eatery!
You can even invite your friends to save and pack lunch with you, cultivating a saving culture along with squeezing in more work being done from the time saved, guaranteeing you an earlier knock-off timing.
7. Make a budget and stick to it
Depending on your preferred style, you can use a notebook or organizer to keep track of your expenditure in different areas, such as fixed purchases and entertainment budgets. This is similar to a popular budgeting method called “envelope budgeting”, where you allocate reasonable amounts to different spending categories and stick to the limits.
However, it is often not easy to visualize the remaining balance versus the number of days left in the month. As budgeting fanatics ourselves, we filled this gap by adding a little bit of smarts to our Expense IQ’s Budgeting section – for example you set aside $300 for a 30-day month, therefore you have $10 a day to spend. If on the 15th day you have spent more than $150, a warning will appear in the app to remind you to spend lesser in that budget! So far it worked out for us pretty well, but do let us know if you would like any additions to the Budgeting feature!
8. Keep a good budgeting app handy on your mobile
As much as some people may prefer to scribble on a notebook or organizer, it is undeniable that in the digital age, apps on our always-on-hand smartphones do make our lives much easier. Apps not only help you keep a neat database, allows for easy backup and duplication, calculate and generate meaningful reports for you, allow easy photo records and even act as your personal assistant (or butler!) by reminding you if you are overspending or forgot to pay your bills.
We cannot say for most other apps, but we made Expense IQ (Free on Google Play) with all the above goals in mind, in order to be the ultimate expense manager and assistant that can adapt to everybody’s needs! From a struggling student trying to budget your allowance, to a working adult aiming to buy a dream house one day, to even small businesses managing their invoices and accounts – Expense IQ is flexible enough to fit all your needs! Here’s a challenge: if you find it insufficient for your needs, contact us! We promise we don’t bite. Sometimes.
Some final words:
We hope our tips were useful for you! The hardest obstacle to overcome for most people is usually self-discipline, but once you conquer that, you’ll be on a much sounder financial footing for the future, both for you and your loved ones.
This article is contributed to by our guest writer Kenneth. Thank you Kenneth! If you would like to contribute an article to our blog, contact us through any of our communication channels!